Exports rise Balance of payments Double entry bookkeeping Two sides to each

Exports rise balance of payments double entry

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Exports rise
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Balance of payments Double-entry bookkeeping Two sides to each transaction Dollar value of money flowing into the country must equal the dollar value of the money flowing out (two sides of the same transaction) Credits activities that brings payments into the country Debits activities that involve payments to the rest of the world
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Current and capital accounts Current account = trade in goods and services Capital account = trade in financial assets Net balance on current account + net balance on capital account + statistical discrepancy = 0 (overall balance of payments = 0)
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Current account Merchandise – trade in goods Services – trade in services Investment income = payment for capital services (interest payments) Unilateral transfers – payments for which no goods or services are provided in return
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Current account
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Balance of payment accounts – 2000 (in millions) Account Credit Debit Net balance Merchandise $183,72 8 $289,56 6 $105,838 Services $71,309 $51,647 $19,662 Investment income $79,749 $83,949 -$4,200 Unilateral transfers -$11,925 Current Account -$102,301 Capital Account $215,00 8 $143,28 3 $71,725 Statistical discrepancy -$30,410
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